In response to RFA-MH-07-051, this R34 application proposes to develop and pilot test an intervention, Treatment Foster Care for Older Youth with Psychiatric Needs (TFC-OY), designed to assist older youth with serious mental health problems who are in transition to adulthood. Older youth with serious mental health problems face substantial challenges as they leave child-serving sectors of care and move into adulthood, yet no evidence-based intervention exists to assist in this transition. In the foster care and juvenile justice systems, most youth with serious mental health problems live in congregate care programs. This application proposes to develop an intervention for older youth with serious mental health problems who live in congregate care using Chamberlin's multidimensional treatment foster care as a base for adaptation. The TFC-OY intervention will a) remove older youth from congregate care settings, b) place them in a treatment foster care family, and provide them with c) transitional planning, d) interventions designed to clarify their psychiatric status and motivate them to manage their mental health care, and e) opportunities for employment and to practice independent living skills. Multidimensional treatment foster care will be modified to provide more opportunities for youth choice, employment and to develop additional step-down options into more independent living. Intervention components will be added that address three clinical issues of older youth identified in preliminary research conducted by the PI: a) a need for greater clarity on the nature of their psychiatric illnesses, b) a need to understand the purpose and value of their psychotropic medications, and c) a lack of continuity in psychiatric treatment when older youth change living situations. In year two, a small sample of older youth in congregate care will be randomized to receive TFC-OY for six to nine months or to receive usual care services provided by residential and child welfare providers. TFC-OY will be qualitatively studied to a) assess issues of acceptability, tolerability and feasibility of the intervention, and b) develop hypotheses about potential mediating mechanisms within the intervention and moderating variables that determine when and for whom the intervention will be successful. The TFC-OY and usual care groups will be assessed at baseline, and 6, 12, and 18 months following randomization to assess the effects of the intervention on functional outcomes (education, employment, criminal system involvement), service use, and psychiatric symptoms. Presuming encouraging results, we will modify TFC-OY based on our findings and submit an R01 application to study its effectiveness.